Think Global, Act Local: Discovery International Chief JB Perrette on How to Win the Worldwide Streaming Race

programming in more than fifty languages. He also has experience in the direct to consumer arena through his oversight of Discoveries, Eurosport, linear and streaming platforms. Perette is a longtime lieutenant of Discovery CEO David Zaslow. The two work together at NBC for years before reuniting about a decade ago at Discovery. In our conversation, Perette shares his enthusiastic thoughts on the potential that he sees for the pending merger of Owner

Media and Discovery. He also weighs in on what events like the Olympics mean to subscription businesses, and he talks about how Discovery is proceeding with the international rollout of its Discovery Plus streamer. Our conversation took place just before Discovery became involved in a public battle with the government of Poland over efforts to ban non European companies from owning media in the country. Discovery owns tv N Group, which marks the largest single investment in the nation by

a US company. Tv N Group includes a news channel, TVN twenty four that has been the target of the license renewal fight. Discovery has vowed to press its case through the existing trade treaty between the US and Poland. In a later interview, Herrette told me that Discovery was quote watching very closely to defend our business interests against regulatory overreach an anti consumer behavior. Herette's thoughts about how all TV is local and other insights are coming up

right to this break. J. B. Parrett, president of the CEO of Discovery International, thank you so much for joining me today. Great to be here. From your perch, I realized that issues about the merger and the deal are still are still very much in the pending phase, and that you can't talk in keep specifics, but from your perch in the international world, based out of London, overseeing you know dozens of dozens of channels in all major

territories of the world. Can you talk about what you see as the kind of the thesis for the merger shaping up and how it will affect the international markets that are so crucial to the global streaming racist these days. Sure, thanks to Yeah, so we we I would say Discovery. I've had the privilege of being this rule now for

almost eight years. UH, and it's been an incredible journey. UM. But Discovery's journey really in the North Star that has been the focus of it for over three decades, has been really kind of following the consumer um, which I think is as true then as it is now and if you think about the evolution. It was one of the first companies to UH in the in the early

nineties kind of move um internationally. It's actually first channel was launching the UK, and that was because it thought, you know what, this incredible content that we're producing and stories are universal and we can tell not them just a great American audiences, but we can tell them to audiences around the world. And so they branched out, followed the customer and took the content around the world over

the last three decades. Then secondly, that following the customer led to the innovation of saying, okay, well we're doing this in pay tell of vision. But at the end of the day, there are many markets around the world where pay television was underpenetrated, and so, again led by the customer, people said, well, why don't we launch some free to air channels and broaden the reach of our

content and our stories to more customers. And so we are now the second largest broadcaster in Europe as an example, UM through our freed air channels across Nordics, Poland, Italy, UK Spain, Germany. Uh and so uh now we're in sort of the next phase, which is obviously in this director consumer world, is there are increasing number of customers that obviously want to access content on on demand and

a direct consumer fashion. And we've embarked on that journey with Discovery, plus the Warner team obviously has been in that journey with HBO Max uh and uh. So where that's the next chapter that we're leaning into heavily. And I think when you look at those two companies coming together, one of the things that is true about this director consumer world is people want choice and they want simplicity.

Uh and UH. If you see obviously the the fairly wide number of different streaming services that are available now. I think people are starting to say, we'll wait a second. You know, it would be great if, rather than forcing the customer to understand what show is where, if more

of it were somehow more easily accessible. And I think part of what is the incredible potential of this, these two companies coming together is the unparalleled breadth of content offering across all genres, whether it be lifestyle, factual UH, some of the greatest traumas, UH, comedy, UM kids documentaries.

This is a powerhouse of unparalleled content offering. And what we've got to work on here with the team as we go through the process is figuring out how do we take those that incredible offering and bring it to customers in a simple UH and compelling fashion. UM. But we think we have a incredible lineup of stories and genres that HE is unmatched in the industry, and we're excited to bring that to market just as soon as we can, obviously get through the regulatory approval process and

and operationalize it. What have you learned, even in small levels, even in some smaller markets, about how you know how customers embrace streaming, how they embrace streaming versus linear and how that changes what they're willing to pay for and how they consume. We obviously have been at this for several decades, and I'd say are the leading global media company, UH, And so we have a lot of lessons. I think Number one is it's not a one size fits all UM.

And that sounds simple, but the reality is, as I always say internally, UH, the idea of international as a single word is the greatest misnomer. UM. You know, this is a collection of very different, very diverse, very rich markets UM. Uh, and everyone is a little bit different.

Number one. Number two is UM you know. I think what we see as part of our differentiation also compared to others in the industry, is we've been at this in producing not just great US content that obviously travels, but we've been producing great local content in many of the biggest markets there for decades. And so we have a very unique combination of great international and US created

UH stories that travel and great local stories. And that combination of great international and great local to US is

sort of the secret sauce that differentiates UM. A Discovery Warner proposition, uh, compared to some of the others that may be more just dominant US lead content offerings, and the reality is to scale and a lot of these markets, the US content is you know, very valuable, and that d libraries incredibly valuable, and in the genres traditional genres of discovery, UH, a lot of those stories are truly universal, which is one of the great things that has allowed

us to expand and become the leading global media company. Is you know, comedy isn't, as an example, is a lot harder because comedy is much more national, much more local, uh, and so doesn't necessarily travel as well. But stories about adventures, survival, lifestyle, um, you know, uh, true crime, even you know, these are genres that that are truly stories that resonate everywhere, and so that is one of the great uniqueness. So not one size fits all. You gotta tailor to the market,

and you've gotta have infrastructure on the ground. And I think one of the other things that we've done over these years is we've got people and teams that know the local markets, that know the marketing app channels, and know the production communities are producing stories um and close

to the greatest storytellers and all these markets. And we are in a period also where content is traveling and actually real credit to Netflix on this one, which is really sort of flatten the world from a consumption standpoint of international global content UM and great stories can come from anywhere, and we think that again on this journey.

We're incredibly well positioned because we have decades worth of storytelling at the international and local at the U S and local international markets level, and we're looking forward to bring that together as we roll out Discovery Plus and as we figure out how best to bring this to

market in the in the Discovery Warner context. As the delayed Tokyo Games get underway, how do you feel about your investment in them and how you know, especially under the kind of extraordinary circumstances that the Tokyo Games are gonna unfold, how do you feel about that as an

investment for Eurosport? Right now, the Olympics are truly the greatest event in the world um and then there's no there's no bigger event in in media on a global scale in the Olympics and the history of the Olympics, if you look back over the last several ones, is every games has a different narrative challenge building up to the Games, whether it be doping or you know, the preparations and the issues around real prep, and you know

Athens had a lot of the prep issues. And one thing that's been consistent, a lot of that conversation happens building up to the games, a lot of noise, a lot of questions. Obviously, this one is not immune to that either, with this unique COVID environment that we're all fighting through. But the same one very important rule is

true in every single one of those cases. The minute the flame gets lit, which as you said, has just happened today, the focus turns to the athletes and the incredible stories of these people who have persevered, particularly in these last two years amidst you know, all the prep

they did, the postponement at retraining, retraining in very difficult situations. Obviously, and while yes, the current one will be unique in terms of obviously no crowds and limitations, but the flip side is the great thing about the Olympics, which is these unbelievable stories of human achievement UH and perseverance and UH are going to be more true than ever in the Tokyo Games and so UM we're excited to bring

those stories to the all the European viewers. We obviously will be the home of the Olympics across all of Europe UM effective now, and we will be providing UH and LEANING in as we've launched Discovery Plus UH in a handful of European markets. UH. The the only place where you'll be able to get every minute of the Olympics live will be on Discovery Plus in the UK, the Nordics, Netherlands, Italy, UM, UH and and UH. And then in markets where we haven't yet launched on Eurosport Player,

we'll have every moment in the Olympics live. And so we have a unique proposition that we're excited to bring the fans across Europe UM and we we're we're very confident that it will continue to be a great event that will unify the world and the frankly, the world right now needs great stories to bring us together and that show the resilience and the accomplishments of of humanity. So the positives I think is meant to be the sort of hallmark of of of these Tokyo Games at

these critical time. UM Sports, as you said, is a complicated business. UM. But the flip side is, UH, what we've also done as you've seen this so slight change in our evolution is as we're rolling out Discovery Plus, Sports and Entertainment, we'll sit together in the product UM And just to be clear, Eurosport is going to be

integrated into the Discovery Plus platform. That's right. So it are in the markets I describe before, it already is essentially rolled into the Discovery Plus offering, so you can have entertainment and you can have entertainment and sports. And as we roll out Discovery Plus and more markets, the same will be true across Europe, where you'll be basically

having one product. Back to the conversation we had earlier about simplicity and choice, UH, that's kind of our north star, focused on the customer and the consumer interests, and we think the simplicity and choice and bringing that together in one product in one offering and allowing people to actually enjoy the best of entertainment and real life entertainment, but also be able to actually watch some of the premier sporting events in the world, all within the same product offering,

UH is ever more compelling and so UM we're going to continue to lean into it. We have a number of different sports rights across Europe and we're into we're really folk based on rolling the great eurosport and sports content overall into the Discovery Plus offering for consumers. So you have to be I mean the timing of these

delayed games. At the time that you're rolling out Discovery Plus, you have Olympics as a very strong you know, almost your your burker is the Olympics rights that are Can you talk about how how you have sliced up those rights? How are you presenting them on Eurosport So um, we obviously have certain obligations with the IOC for a certain amount of free to air coverage, which we do either on our own channels or with sub licensed partners in

individual markets. UM. But as I mentioned earlier, the key thing, UH will be that really Discovery Plus and Eurosport Player in the markets were Discovery Plus is not yet available, will be the only place that you can get every single minute live. So if you know there's over three thousand live event hours uh of the Olympics in the summer, um and the only place where you can literally if you're a fan of the sports and you don't want to necessarily figure out, you know, what's on here, what's

on there? You know you through the Discovery Plus subscription or U Sport Player subscription, you don't have to think of any of that. It will be personalized, tailored to you, and you have every minute of the games which you

can access um live through uh either either service. And as we get to Beijing, which is obviously in the winter and six months away and has been prepared for Paris, which will be a huge homecoming of the Games across Europe, and by that point in time, we obviously will be much further along in terms of rolling out Discovery Plus or whatever. The subsequent product at that point will be

um we uh we. We can't wait to use this incredible event to bring more and more people into the tent and into the fold and experience not just the games but all the other content that will come with it, uh uniquely on on our Discovery class and streaming platform. And do you there, the excitement level and the buzz and the traction is enough to get you the sponsorship and they get the traction in the revenue generating areas that you need to justify the rights of fees like

you feel like this has been a good investment for Eurosport. Absolutely, I mean it is. There's look, as we were talking about it's it is. Sports is an expensive proposition by its nature, but it's also a beacon, uh and a as David Zaslow says, in terms of, you know, thinking about stuff in the subscription world where people will pay for it before they'll pay for dinner, sports is at the very top of that pyramid because it draws a passion and an interest that is almost like nothing else

in the world. And so it's a very powerful tool. Um. And we're excited to have the pre eminent event uh for Tokyo, for Beijing and then on to Paris to help us on this journey continue to scale and get Discovery Plus in front of more and more audience and consumers over the next you know, two or three years, how much you talked about the need for tailoring and customizing for individual markets. I imagine that you're doing that

for the within the Discovery Plus platform as well. Or is that more of a uniform offering now it's all very customized because Uh, at the end of the day, again, in every market, we have a combination of what will be consistent is sort of the deep and rich library of US LED content will be available on all the different platforms. But what is different in every market is UH the other part of the equation, which is the

great local content. And so whether you're you know, in UH in Norway and all of our great Norwegian series and comedies, etcetera that will complement the service, or in Italy with all the great Italian content and the years of of US being the number three broadcaster there and being able to provide all the content provide war. If you're in Brazil UH and you have all of our local Brazilian content that we commission UH, it will be a a. And then again, sports obviously is a layer

on top. So it's not a uniform global offering other than the kind of core elements of it. In terms of the US LED UH factual programming. UH is consistent UH generally everywhere in terms of its offering, but it's then supplemented with incredibly strong local entertainment content, local factual

content and sports in select markets don't go anywhere. We'll be right back with more from Discovery International CEO J. B. Perrett, and we're back with more from Discovery International CEO J B. Per Where do you see either areas for expansion for you or areas markets where you see real growth? Where

do you see opportunity right now? Internationally? I think there's a couple of different areas that if you think about it, UM there are still as a percentage, you know, we think of the US UM and and pay TV penetration in the US, which obviously had hit you at its peak five you know, almost ninety and has obviously come down a bit, but streaming is sort of a different version of it's still pay television in outside of outside of the US, there are many many big markets, take

Italy as an example, where uh the entry price of traditional package of PayTV yet sort of forty dollars plus or fifty dollars plus has uh capped the the potential and where penetration of that kind of an offering has been,

you know, not more than at its peak. And so you have of the audience and the customer base that UM just never found that compelling enough and the price point may be too high as an entry price point for them to experiment in some of the premium content, and so our ability to take our product offering and sort of this uh in this you know, five to seven dollar price range um uh and bring it to market with partners like Telecom Italia the mobile partner like

a Vota phone UM and bring their enormous mobile bases which are you know, in some cases ten x the size of the traditional PayTV universe. We have an enormously bigger serviceable addressable market number one and number two, we have an tree price point and a package uh and a service offering that is way more compelling at a price point that's way more attractive for people to experiment and get in with than historically what was priced that you know, again ten x higher than where we are.

So for us, that's probably the single biggest opportunity is getting more people uh exposed to our content with a great new product um and user experience that they can you know, enjoy uh on their own schedule and on their own time UH and uh, and working with partners who can help deliver that too. Uh. You know, hundreds of millions of more users than we ever were historically when we were you know, sort of stuck in the higher priced PayTV packages and bundles, which are still compelling

by the way for a certain customers segment. So I know, oftentimes this is sort of made into a debate of you know, does pay TV die and streaming win. Our view is look over the decades when pay television originally came out in the eighties, people, and then in the nineties started to get traction, people settling broadcast is gonna die, and broadcast is still alive and and well, and yes, audiences just shifted, but it's still a pretty healthy business and has made you know, a ton of money over

the years, um. And so for us, it's not about the death of one and the survival of another, but it's about geography shifts, and we like this idea of being able to superserve customers, some of whom will want to continue to watch linear channels. Maybe those are slightly you know, an older demographic, UM, but we don't want to exclude them. And so the linear channels are still

important in that respect. H and free to air is still valuable from that respect and gives us also a great marketing and promotional channel to drive these other products. Pay TV is still vibrant and healthy. And then we have this whole new uh customer segment that does want UH have access on a direct a consumer basis and a more flexible uh kind of ability to choose smaller

packages of their liking. And that's a whole new customer segment for us to go after, and frankly a bigger one given the scale that we just talked about of of people who might be interested in that at that price point versus the higher price you know, bigger bundles. Um JP. Tell me a little bit about yourself. How did you get into the business of international television. Where did you grow up? So? I I I'm I'm a hybrid. So my father's French, my mother's American, UM, hence the

accents American, and the name is French. UM. I grew up in uh in New York mostly New York City, was born and raised in New York City. UM in Manhattan, which people sort have always sometimes scratched theirhead and didn't realize that people actually do grow up and live in Manhattan. Are born and raised in Manhattan. Uh. And my father is from Brittany in the northwest part of France, and so I have very strong ties there and it's about

everything summer of my life. Uh there Uh, so I'm sort of by I'm a different Bi coastal uh, East coast and and and French coast um. UH. And I I came in um to the media business in in two thousand UM, starting at NBC in business development and then has spent the last you know, over two decades

of working here. And I've had the great privilege early on in my career at NBC of coming uh into contact with David Zaslow UH and UH have been a huge fan and he's been an enormous uh not just UH you know, mentor and UH guide, but somebody I've learned a ton from and obviously respected from very early on and had the great privilege of working with him for the last two decades UM. And so UH that's

been a huge obviously part of my journey. UH. And I took this job and I joined Discovery in two thousand and eleven, UH and took this job in two

thousand fourteen. UM. And then one other note I'd say is which I think back to this sort of evolution of the industries, you know, back in two thousand six when David and I actually when David was still at NBC, we had just finished actually the the the Torino Games Olympics, and there was this little thing called YouTube that was starting to take off in a major way and had taken off with a lot of clips from that time Saturday Night Live exactly but clearly showed the appetite and

the desire from the consumers to access this stuff. And uh, you know, Google bought it for a billion six I think it was at the time, and David and I looked at each other and said, you know, why can't we do this? Um, And that was the beginning of our conversations around trying to create what then later became Hulu. Uh. And we went around and talked to all the different partners and it turned out that Fox and some of

the others have been talking about something similar. And you know, despite the fact that media joint ventures have a graveyard that is very, very large. UM, we thought it was compelling enough that we should try and pull it off. And you know, obviously I think two lessons there is

number one. We're always focused on, you know, uh, if the consumer, if there's a consumer demand and interest, you gotta need to try and figure out how you fulfill it, because, particularly in the digital age, if you don't fulfill that somebody else will and it may not be legitimate um in many cases. And so being really kind of consumer

focused was an early indicator there. Uh. And second point is that you know it's an evolution still because when I think back to we did that, we finally made the joint venture happen and launched in two thousand seven, you know, that's approaching fifteen years ago. And you know, so much has evolved in the fifteen years, but fifteen years a long time, and yet I feel like we're still in the infancy of this of this new era.

And despite the fact that people were talking about streaming wars and all this, you know, we've got there's a long way to go still in the evolution. And when you think about it, particularly on a global level, not just a US lens, but a global lens, there are plenty of territories where it's just it's the early innings of this streaming game. And uh, I must say, I can't wait. When you look at the lineup and the content offering and the potential of what the Warner and

Discovery combination can bring. Um, you know, I think there's without question we can be one of the top three leaders in this streaming space over time as these two companies come together, and I think that's the incredibly exciting potential that that we're getting more and more excited about every day. Thanks for listening. Be sure to leave us a review at Apple Podcasts. We love to hear from listeners, and be sure to tune in next week for another episode of Strictly Business